EasyMoney: Lack of funding is curbing efforts to tackle housing shortage
A LACK of funding is still hampering efforts to solve the housing crisis despite the relaxation of planning rules, EasyMoney warns.
The peer-to-peer property lender has analysed government data showing the number of office to residential conversions fell to 1,740 in 2017/18, down 19 per cent annually.
The figure is a 44 per cent decline compared with 2014/15.
It comes despite the government relaxing planning rules in 2013 so developers could more easily convert commercial premises into residential buildings.
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Despite this, EasyMoney warns, the total value of lending to property development businesses fell to just £13.8bn in November 2018 from a peak of £35.2bn in November 2013.
The research also cites data from Colliers International showing that 11.9 million square feet of central London office space was available at the end of June 2018, equivalent to almost 100 buildings in the centre of the capital alone.
The P2P lending platform says that these figures show there is significant scope to turn office space into residential property.
“Considering the housing shortage in the UK, it is surprising that fewer conversions are taking place,” Andrew de Candole, chief executive of EasyMoney, said.
“The government reduced red tape to kick start conversions five years ago, but the funding problem continues to persist for housing in the UK.
“There is demand and space to get projects started. However, many developers aren’t getting the funding they need to put spades in the ground. This has created an opportunity for investors to provide financing.
“Private investors now have opportunities to capitalise on these trends by funding developments. As a result of reduced lending to property developers, more and more developers are seeking options that can help get their projects off the ground.”